Brokers look on as Brightoil rushes to avert VLCC sell-off

Hong Kong brokers are closely watching recent events of struggling Chinese concern, Brightoil Petroleum, drooling for the possible commision earned, if awarded the chance to sell some of the Chinese giant’s arrested assets. However, Brightoil has come out today, claiming it is in a position to fix its financial shortcomings to the frustration of many S&P brokers.

Sources tell Splash that the 2012-built VLCC
Brightoil Glory is of special interest at the moment. According to a court file seen by Splash, Nord/LB has demanded Brightoil pay off its debts under a ship mortgage agreement related to the Brightoil Glory, a ship with a market value a bit under $70m. The ship is one of three VLCCs arrested this year. The first was the 2013-built VLCC Brightoil Gem arrested in Haikou, followed by the arrest of Brightoil Grace and Brightoil Lion in Singapore.

Last week the High Court of Hong Kong gave a writ of summons to the owners of Brightoil Glory, giving them 14 days notice to sort out the claim or risk having the ship sold off.

In response, Brightoil Petroleum today announced that it has reached settlement with creditor Broad Action Limited regarding a winding up petition filed by the latter against the company in the High Court of Hong Kong due to a $42m debt dispute.

As part of the settlement, Brightoil and Broad Action have filed a consent summons at court for the withdrawal of the petition.

Brightoil said it is also negotiating with other creditors which have issued statutory demands against the company and its subsidiary Brightoil Shipping Singapore, in efforts to seek settlement options and creditors’ support to reorganise the company’s debts. Currently Brightoil has total creditor claims amounting to around $250m.

“The board wishes to inform shareholders and investors that while there are claims made by some creditors against the group, work in relation to the potential debt reorganization is actively pursued by the group,” Brightoil said.

According to the company, under the guidance and coordination of the People’s Bank of China, a committee led by a key financier is in discussion with the group to advance the formulation of the debt reorganization plans, which would include renewal of existing credit facilities, takeover of existing loans by certain key financiers and/or disposal of assets for raising capital to pay off a portion of the existing debts and enhancing liquidity.

The company also plans to push forward its earlier announced plan to sell its Zhoushan oil storage and terminal facilities in order to increase liquidity.

Hans Henrik Thaulow is an Oslo-based journalist who has been covering the shipping industry for the last 15 years. As well as some work for the Informa Group, Hans was the China correspondent for TradeWinds. He also contributes to Maritime CEO magazine. Hans’ shipping background extends to working as a shipbroker trainee with Simpson, Spence & Young in Hong Kong.